FHA Loans: What You Need to Know

by Christina Yang 08/11/2019

Buying a home is a beautiful feeling, but dealing with the financial aspect of it can be tiring. Well, thanks to mortgages, the financing is no longer a headache. From conventional to Government-insured mortgages, homeownership is now a dream that can be turned into reality once you have done your homework, arrived at a budget, reviewed your credit and nailed down your down payment amount.


The America government is not a mortgage lender but has been helping many Americans become homeowners. How? Through government agency loans, namely:

- Federal Housing Administration, also known as FHA, loans

- The U.S. Department of Agriculture, also known as USDA, loans

- U.S. Department of Veteran Affairs, also known as VA, loans

This article will cover FHA loans: how they work, who is eligible, and everything you need to know about it. 


What Is an FHA Loan?

FHA loans give borrowers who do not have a significant down payment saved up and don't have good credit the opportunity to own a home. Since its inception in 1934, the FHA has insured over 40 million home loans.


Types of FHA Loans

FHA mortgagee loans come in different forms. Each form is dependent on your assets, income, age, and current home equity, should any be present. There are seven types of FHA loans:

- Fixed-Rate Purchase Loan

- Adjustable-Rate Purchase Loan

- Condominium Loans

- Secure Refinance Loan

- Home Equity Conversion Mortgages

- Graduated Payment Loan

- Growing Equity Loan


Closing Costs

Like other kinds of mortgage loans, FHA loans come with closing costs. However, expenses may be different depending on lenders, market conditions, geographic location, and down payments.

If you wish to lower your closing cost, you can do so by increasing your credit score, shop through multiple lenders, check for settlement and title companies, or negotiate with the lender you've selected.


FHA Loan Pros and Cons

FHA loans have many benefits such as low down payment, better interest rate, and credit score flexibility. The only downside of FHA loan is that you have to get mortgage insurance that stays with you throughout the life of your FHA loan.


What You need to qualify for an FHA Loan

You will need some form of identification to begin qualifying for an FHA loan. Driver licenses, military IDs, passports, or any other kind of government-issued ID is an acceptable form of identification. You'll also need your bank statements from the last two months and investment statements from the last two years. Be sure to have at least one month of pay stubs available, as well.

If you run a business or you are self-employed, you will be asked to provide:

- Your current tax year profit and loss statement 

- At least two of your recent tax returns

Talk to a mortgage and loan specialist to get the process started.

About the Author
Author

Christina Yang

Christina Yang was born in America and raised in Taiwan during her younger years. Christina has been living in  Sonoma County for the past 20 years, working in the Service Industry, mainly  in restaurants. Customer Service has been a leading factor in her success with the consumer. She understands the emotions involved in Buying & Selling homes. Christina prides herself on using good listening & communications skills. She is fluent in Mandarin & English.  Christina considers her clients as family and truly has their best interest at heart. Christina resides in the city of Santa Rosa with her husband and two children.  

Thinking of Buying or Selling a home?  With Christina you have a friend and a trusted adviser in Real Estate. 

Christina 是位专业的房地产经纪人,能说一口流利的普通话和英语。她可以提供给您最迅速与专业的地产服务。她用心倾听客户的需要,为您寻找您理想的居家环境。秉持诚信为人处事的原则,她以客人的利益为优先。无论是自住还是投资,买房或卖房,Christina 都能一路提供您专业的服务。服务范围包括:各类住宅、房屋买卖、投资,免费咨询,房屋估价。

Christina 已经在湾区居住了20年,这里拥有全美最怡人的气候,也是美国房产最受欢迎的地区之一。在这之前她和她的家人一起生活在台湾。所以她深深的理解东西方文化之间的差异,也因此和客戶的交流可以更加流畅和易懂。她有强大的国际视野,而这一切都来自於这些年广泛的全球业务。同时她也在全球各地旅行,丰富的阅历为她的全球业务提供了更多的支援。
Christina 热爱她的工作,能够实现客人的梦想,就是她最大的梦想!

如果您想与 Christina 联络,请打707-591-5496或发电邮。如果您在大陆,请发电邮或是微信 (帳號:CHRISTINA_K_YANG),請留下您的电话号码,Christina 会盡快打電話給您,直接与您通话。